{"id":67,"date":"2006-04-26T13:35:24","date_gmt":"2006-04-26T18:35:24","guid":{"rendered":"http:\/\/johncbogle.com\/wordpress\/2006\/04\/26\/two-new-articles-on-executive-compensation\/"},"modified":"2006-04-27T05:46:50","modified_gmt":"2006-04-27T10:46:50","slug":"two-new-articles-on-executive-compensation","status":"publish","type":"post","link":"https:\/\/johncbogle.com\/wordpress\/2006\/04\/26\/two-new-articles-on-executive-compensation\/","title":{"rendered":"Two New Articles on Executive Compensation"},"content":{"rendered":"

The Times’ Gretchen Morgenson had a wonderful profile<\/a> this past Sunday of the proxy battle going on over executive compensation at Pfizer. I was especially pleased, as you might imagine, that she saw fit to quote my new book, writing:<\/p>\n

But recommendations from proxy advisers, who are paid by institutions for advice on how to vote, are not always heeded \u00e2\u20ac\u201d a vivid example of a power shift outlined by Mr. Bogle, in his book, “The Battle for the Soul of Capitalism.” Ownership of American companies, he argued, has moved from a diffuse group of individual shareholders into a handful of powerful financial institutions such as mutual funds and banks. These organizations are “reluctant dragons” when it comes to exercising corporate citizenship, Mr. Bogle wrote.<\/p>\n

One reason, he said, “is the clear conflict of interest they face in managing the retirement plan assets of the very corporations whose shares they own and collectively control.”<\/p>\n

“Even when a governance or proxy issue involves a corporation that is not a client,” he added, “the reluctance to speak out persists, giving credence to this perhaps apocryphal comment by a pension fund manager: ‘There are only two types of clients we don’t want to offend: actual or potential.’ “<\/p><\/blockquote>\n

And Alan Murray at the Wall Street Journal weighed in<\/a> today, too, writing:<\/p>\n

\n

Defenders of the current system say CEO pay is set by market forces. But I am skeptical. Who else out there is eager to pay Messrs. McKinnell, Seidenberg, Whitacre and Nardelli upward of $10 million a year for lackluster performance? I’m reminded of the New York Stock Exchange directors who justified increasing Dick Grasso’s pay package — which enabled him to amass $200 million, a good portion of it during his eight-year reign as CEO — by citing fears he might leave to become secretary of the Treasury, a job that pays $175,700 a year.<\/p>\n

That kind of logic is only used by those spending other people’s money. And that’s why shareholders deserve a greater say.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

The Times’ Gretchen Morgenson had a wonderful profile this past Sunday of the proxy battle going on over executive compensation at Pfizer. I was especially pleased, as you might imagine, that she saw fit to quote my new book, writing: But recommendations from proxy advisers, who are paid by institutions for advice on how to […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,5],"tags":[],"class_list":["post-67","post","type-post","status-publish","format-standard","hentry","category-commentary","category-press-clippings"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/johncbogle.com\/wordpress\/wp-json\/wp\/v2\/posts\/67","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/johncbogle.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/johncbogle.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/johncbogle.com\/wordpress\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/johncbogle.com\/wordpress\/wp-json\/wp\/v2\/comments?post=67"}],"version-history":[{"count":0,"href":"https:\/\/johncbogle.com\/wordpress\/wp-json\/wp\/v2\/posts\/67\/revisions"}],"wp:attachment":[{"href":"https:\/\/johncbogle.com\/wordpress\/wp-json\/wp\/v2\/media?parent=67"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/johncbogle.com\/wordpress\/wp-json\/wp\/v2\/categories?post=67"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/johncbogle.com\/wordpress\/wp-json\/wp\/v2\/tags?post=67"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}